A.G. James vs Assistant Commissioner (ASSMT), Department of Commercial Taxes and Another

C.K. Abdul Rahim, J.—Challenge in this writ petition is against exhibit P7 order of assessment finalised in accordance with rule 6(5) of the Central Sales Tax Rules (CST Rules). In spite of the effective remedy of statutory appeal provided, the petitioner is challenging the impugned assessment, on the premise that it was finalised in violation of the mandatory procedure prescribed and also in violation of principles of natural justice. The specific contention is that, the petitioner was served with exhibit P5 proposal notice calling for objections against the assessment proposed within seven days of receipt of the said notice. It is also stated that the petitioner was given an opportunity for personal hearing on any day during the office hours within the time stipulated in the notice. Exhibit P5 notice is dated December 23, 2010. According to the petitioner, exhibit P5 was served on the petitioner only on December 27, 2010. It is evident that on the seventh day of receipt of the said notice, the petitioner had submitted exhibit P6, request to the assessing authority seeking extension of time for producing the books of accounts, on the ground that the petitioner is suffering from illness and could not take active participation in the proceedings. But the assessment was finalised on the very same day, i.e., on January 3, 2011 itself, holding that the request could not be considered because the petitioner had failed to produce C forms in support of the claim, till that date. It is mentioned in exhibit P7 that the assessment being related to the year 2006-07, it will get time-barred on March 31, 2011. Hence, declining any opportunity to the dealer to file C forms and to produce the accounts, the assessment was finalised, rejecting the request for allowing time. Therefore, the assessment is unsustainable, is the contention.

In the statement filed on behalf of the first respondent it is mentioned that, the request for adjournment was not granted, because the assessment was getting time-barred as on March 31, 2011. It is further stated that the assessing authority had taken leave, preparatory to his retirement on January 4, 2011, after completing the assessment on January 3, 2011.

On the facts and circumstances as enumerated above, it is evident that no proper opportunity was granted to the petitioner to raise any effective objections and to produce the books of account against the proposal. It is evident that the proposal notice in question was received by the petitioner on December 27, 2010. Admittedly, the request for adjournment was submitted on January 3, 2011, i.e., on the seventh day after receipt of the notice. But it is seen that the assessment was finalised on the very same day itself, despite the fact that the assessment will get time-barred only by the end of March 2011. It is evident that the petitioner was not given any notice about rejection of the request for adjournment. In other words, the assessing authority has not taken any steps to put the petitioner on notice about such rejection. In all probability the assessing authority could have allowed a reasonable time for filing objections and for production of the books of accounts.

It is trite law by this time that the proceedings of assessment is a quasi-judicial function and the authority concerned are bound to follow principles of natural justice. Based on the facts as enumerated above, the order of assessment could not withstand the test of sustainability, when evaluated on principles of natural justice. Hence, I am of the view that the impugned order is unsustainable.

Under the abovementioned circumstances, the writ petition is allowed and exhibit P7 order of assessment is hereby quashed. The first respondent is directed to complete the assessment afresh after affording reasonable opportunity to the petitioner. The petitioner will file objection against the proposal notice within two weeks from the date of receipt of a copy of this judgment. If any such objection is filed the assessment shall be finalised afresh, after affording opportunity of personal hearing to the petitioner. The needful in this regard shall be done as early as possible, at any rate, within a period of one month from the date of receipt of such objection. The petitioner is directed to produce a copy of the judgment before the first respondent.